Oct. 19, 2016
The Somersby site is one of the German company’s key points for developing non-chemical products which use beneficial bacteria, parasites and enzymes to combat pests and diseases in horticulture and broadacre crops.
Upgrading work at the production facility, acquired by BASF three years ago, will almost double the number of “growth chambers” on site to seven sealed climate controlled rooms where biological ingredients are cultivated.
The expansion will also enable the plant to contribute to the company’s international supply of recently released insecticide, Velifer, for the glasshouse and covered horticulture market.
Velifer, a biological insecticide made from spores of the soil-borne fungus Beauveria bassiana, provides a non-chemical option for “protected” horticultural croppers who risk building up pesticide resistance in insect populations attacking their crops.
BASF’s biological investment moves come a year after it opened a 27-hectare research farm south of Tamworth and just over two years since BASF officially re-launched its agricultural crop protection business in Australia.
The research farm, which will have about 120 trial crop areas when fully developed, is playing a key role in trialling new products for the Australian market, including most of the 25 new agricultural and professional pest control lines BASF expects released in the next five years.
The Nemingha property currently has 35 trial sites, with 25 more to be established within months.
Although it is the world’s biggest general chemical company, BASF’s crop protection business in Australia was effectively put on ice last decade, with local manufacturer Nufarm given temporary production and marketing rights to several products.
BASF launched back into the Australian market in its own right in early 2014 with a new team of about 70 agronomy, sales, production and support staff.
While biological spray products only accounted for about two per cent of the world’s $76 billion crop protection business last year, BASF estimates this market has great complementary value for the farm chemical sector and is growing about 11pc annually.
In April it opened a new crop protection headquarters in Limburgerhof, Germany, housing biological and seed research in one centre to drive innovation work “beyond classical crop protection”.
Meanwhile, rival German chemical multinational, Bayer, has just released the first product in its new Bayer Biologics range in Australia - Serenade Prime, a product based on beneficial bacteria Bacillus subtilis.
The bacteria colonises new root systems enabling better nutrient uptake while encouraging plants to provide a food source for the bacterial colonies.
BASF’s head of agriculture for Australia and New Zealand, Gavin Jackson, said an extra six scientists and technical production staff would work at the upgraded Somersby plant.
The factory’s current team of 11 focuses mostly on biological-based seed inoculant Nodulaid used to boost nitrogen fixation and yield capabilities in legume crops from lupins and soybeans to clover.
Much of that product sells in Australia, but once the upgrade concludes by next March the plant will play an increasing export role in the BASF supply chain.
“The investment demonstrates our confidence in the technical expertise and capacity of the team at Somersby and our commitment to delivering latest innovations in crop protection to customers in Australia,” Mr Jackson said.
“We don’t see biological products as a replacement for traditional chemistry, but we expect them to play an increasing role in co-formulated products to target specific disease or pest management problems and assist a crop’s performance.”
New biological pesticide Velifer, due to be registered for a local launch later next year, follows close behind BASF’s recent release of barley seed treatment chemical, Systiva, for foliar disease protection.
Broadleaf herbicide, Sharpen, and vine and tree crop fungicide, Sercadis, are other key products currently in BASF’s Australian-approved arsenal, soon to be backed up by a new ryegrass herbicide for canola and a rodent control bait specifically produced for intensive animal enterprises such as piggeries.
The company’s global Agricultural Solutions revenue was about $8.4 billion last year - up 75pc in the past decade.
Mr Jackson said a pipeline of products due for global launches in the next 10 years was expected to produce up to $4.3b in additional sales.
BASF’s global crop protection president, Markus Heldt, has also confirmed BASF is actively pursuing acquisition or market niche opportunities likely to emerge from the spate of farm chemical company mergers and divestments announced this year, including the latest $88b Monsanto-Bayer deal.
“Changes lead to new opportunities for business growth and differentiation,” he said.
Despite current “macroeconomic volatility” in the agricultural market he said it remained a “highly attractive” segment.
However, the business environment was challenging and BASF was not expecting its crop protection division to exceed last year’s profitability levels.
BASF’s other portfolios include oil and gas, chemicals, performance products, and functional materials and in total generated sales of more than $100b in 2015.
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